March 29, 2004 "The Independent" -- An army of thousands of mercenaries has appeared in Iraq's major cities, many of them former British and American soldiers hired by the occupying Anglo-American authorities and by dozens of companies who fear for the lives of their employees.

Many of the armed Britons are former SAS soldiers and heavily armed South Africans are also working for the occupation. "My people know how to use weapons and they're all SAS," said the British leader of one security team in southern Baghdad. "But there are people running around with guns now who are just cowboys. We always conceal our weapons, but these guys think they're in a Hollywood film."

There are serious doubts even within the occupying power about America's choice to send Chilean mercenaries, many trained during General Pinochet's vicious dictatorship, to guard Baghdad airport. Many South Africans are in Iraq illegally--they are breaking new laws, passed by the government in Pretoria, to control South Africa's booming export of mercenaries. Many have been arrested on their return home because they are do not have the licence now required by private soldiers.

Casualties among the mercenaries are not included in the regular body count put out by the occupation authorities, which may account for the persistent suspicion among Iraqis that the US is underestimating its figures of military dead and wounded. Some British experts claim that private policing is now the UK's biggest export to Iraq--a growth fueled by the surge in bomb attacks on coalition forces, aid agencies and UN buildings since the official end of the war in May last year.

Many companies operate from villas in middle-class areas of Baghdad with no name on the door. Some security men claim they can earn more than lbs80,000 a year; but short-term, high-risk mercenary work can bring much higher rewards. Security personnel working a seven-day contract in cities like Fallujah, can make $1,000 a day.

Although they wear no uniform, some security men carry personal identification on their flak jackets, along with their rifles and pistols. Others refuse to identify themselves even in hotels, drinking beer by the pool, their weapons at their feet. In several hotels, guests and staff have complained that security men have held drunken parties and one manager was forced to instruct mercenaries in his hotel that they must carry their guns in a bag when they leave the premises. His demand was ignored.

One British company director, David Claridge of the security firm Janusian, has estimated that British firms have earned up to lbs800m from their contracts in Iraq--barely a year after the invasion of Iraq. One British-run firm, Erinys, employs 14,000 Iraqis as watchmen and security guards to protect the country's oil fields and pipelines.

The use of private security firms has led to some resentment amongst the Department for International Development's aid workers--who fear it undermines the trust of Iraqi civilians. "DFID staff would prefer not to have this," said one source. "It's much easier for them to do their job without any visible security, but the security risks are great down there."

One South African-owned firm, Meteoric Tactical Solutions, has a lbs270,000 contract with DFID which, it is understood, involves providing bodyguards and drivers for its most senior official in Iraq and his small personal staff.

Another British-owned company, ArmorGroup has an lbs876,000 contract to supply 20 security guards for the Foreign Office. That figure will rise by 50 per cent in July. The firm also employs about 500 Gurkhas to guard executives with the US firms Bechtel and Kellogg Brown & Root.

Opposition MPs were shocked by the scale of the Government's use of private firms to guard British civil servants, and claimed it was further evidence that the British army was too small to cope. Menzies Campbell, the Liberal Democrat's foreign affairs spokesman, said: "This suggests that British forces are unable to provide adequate protection and raises the vexed question of overstretch--particularly in light of the remarks by the Chief of the Defence Staff, last week that Britain couldn't stage another operation on the scale of Iraq for another five years."

Andrew Robathan, a Tory MP on the international development select committee and former SAS officer, said: "The Army doesn't have the troops to provide static guards on this scale. Surely it would have been cheaper to have another battalion of troops providing guards."

The UK's largest private security firm in Iraq, Global Risk Strategies, is helping the coalition provisional authority and the Iraqi administration to draft new regulations. It is expecting to increase its presence from 1,000 to 1,200 staff this spring, and could reach 1,800 this year. However, aid charities are disturbed by the sums being spent on security, since DFID has diverted lbs278m from its mainstream aid budget for Iraqi reconstruction. Dominic Nutt, of Christian Aid, said: "This sticks in the craw. It's right that DFID protects its staff, but this is robbing Peter to pay Paul."